A defiant Argentine government yesterday launched a last-ditch attempt to stave off complete financial collapse.Banks and currency exchanges remained closed in Argentina, and the decision to partially unfreeze bank accounts didnot silence protests. In light of continuing protests, the embattled government instituted a six-month ban on furtherlegal challenges to its economic plans. Over the weekend, the Argentinean Economy minister admitted that LatinAmerica’s second largest economy was "broke" as he announced an austerity budget and eased the unpopular depositcontrols, which the supreme court ruled unconstitutional last week.
Outraged Argentineans have taken to the streets and occupied bank branches to protest against the restrictions, whichthe previous government introduced in early December to stave off a run on deposits. Banks will now be banned fromselling dollars. The government will allow the peso to float freely against the dollar when the foreign exchangesreopen tomorrow after a two-day bank holiday to calm the markets.
But with no faith in local currencies after decades of devaluations and inflation, locals have voted with their feetand lined up at banks to buy whatever dollars they can. The measures received backing from the World Bank yesterdaybut the International Monetary Fund, which Buenos Aires is hoping will back the reforms with a fresh injection ofcash, made no comment.
- Alejandro Bendana, President of the Centro de Estudios Internacionales in Managua, Nicaragua, formerSecretary General in the Foreign Ministry of the former Sandinista government of Nicaragua and former Ambassador tothe United Nations. He is co-Chair of the Ethics and Justice Committee of the International Campaign to ban Landminesand the author of several books.
- Rick Rowley, filmmaker with BigNoiseFilms at the World Social Forum who is setting up an Independent MediaCenter in Argentina.
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